Alaska Communications (ALSK) Stock Climbs On Acquisition News

Alaska Communications ALSK Stock News

Alaska Communications Systems Group Inc (NASDAQ: ALSK) is making a run for the top in the market this morning, and for good reason. The company announced that it will be acquired in a deal worth $300 million. Here’s what’s going on:

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ALSK Stock Rockets On Acquisition News

In the press release, Alaska Communications Systems said that it has entered a definitive agreement to be acquired at a price of approximately $300 million, including debt. According to the agreement, Macquarie Capital and GCM Crossover will acquire the company, taking Alaska Communications private.

As part of the agreement, all outstanding shares of common stock will be purchased for a $3 per share. At that price, the premium works out to 57% over yesterday’s closing price. It is expected that the transaction will come to a close in the second half of 2020.

In a statement, David W. Karp, Chairman of the Board of Directors at ALSK, had the following to offer:

After carefully evaluating Macquarie Capital’s and GCM’s offer, we are confident that this transaction is in the best interest of Alaska Communications and its stockholders. Macquarie Capital has a proven track record of delivering large and complex transactions globally on accelerated timelines, and GCM’s Labor Impact Fund provides strategy driven capital that we expect will generate real value for our customers and the Alaska Communications workforce.

The above statement was followed up by Bill Bishop, President and CEO at ALSK. Here’s what he had to offer:

This transaction with Macquarie Capital and GCM represents an exciting opportunity to enhance our financial position and expand our resources to better serve our customers. Macquarie Capital has extensive experience navigating the complexities and issues associated with public-to-private transactions, as well as addressing the various regulatory regimes associated with communications infrastructure transactions.

It also has deep telecommunications expertise and a strong track record of investing in capital intensive businesses, which will be critical as we deliver on our strategy to utilize our superior customer service and fiber-based network solutions in providing industry-leading telecommunications products and services. Finally, GCM’s Labor Impact Fund provides strategic value to our business both through its experience in the telecommunications sector and in fostering partnerships with a unionized workforce. We firmly believe this transaction will allow us to enhance our expanded fiber network services and drive long-term value for our customers in Alaska and the Lower 48.

This News Is Huge

The news released by Alaska Communications this morning proved to be overwhelmingly positive. After all, any time such a strong premium is offered in an acquisition, investors are going to be excited.

While a definitive agreement has been signed, it’s important to keep in mind that the transaction is subject to shareholder approval, regulatory approvals, and customary closing conditions.

Moreover, although this is a great deal for ALSK investors, it may not be the best deal on the table. So, the agreement has a clause, allowing Alaska Communications to solicit superior proposals from third parties for a period of 30 calendar days. In the press release, the company said that it plans on working with advisors in order to solicit competing offers.

All in all, there’s a good deal already on the table, but it may get even better for investors, making ALSK stock one to watch closely.

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